Almost everyone has heard about wills and trusts, but what is the difference between the two? Is one better than the other? While everyones situation varies, the more you understand about how they differ, the better decision you can make for you and your family.
First, we can start with some simple definitions. A Will-based plan is an estate plan that instructs the Probate Court of your wishes on how you want your assets distributed upon your passing. A Trust-based plan is an estate plan that includes a Revocable Trust to hold title to your assets during your lifetime and transfer those assets after death outside of the probate process.
In either a will or a trust, you can name your spouse, children, parents, relatives, charities, and even the United States Government to receive your assets (surprisingly, in 2013, over $1.7 million was given by private citizens to the federal government, specifically to reduce the national debt).
So, what’s the practical difference?
The difference between a Will-based plan and a Trust-based plan is that with only a Will in place your family will have to go to Probate Court to get access to your assets in the event of your incapacity or death.
Your Will indicates WHO you want to have access to those assets and how you want them distributed, but it does not keep your family out of Court. Probate can be expensive, time-consuming, and cause conflict amongst beneficiaries.
When your estate is in a Trust, you avoid probate court intervention, which allows assets to be directly distributed to your chosen beneficiaries. Although, there is a bit more work for you to do upfront because you need to make sure that all of your assets are owned in the Trust throughout your lifetime, we can help you with that or even do it for you.
We will be discussing how you can best protect yourself and your family at our Life & Legacy Planning Presentation on Saturday, February 4th at 10:00 a.m. The presentation will be held in the Community at the Hilbert Village Hall. More details can be found by clicking here!